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Tag Archives: EPFO

The proposal of the government to reduce the contribution to the EPF from 12% to 10% has been defeated for the time being. In the meeting of the EPFO in which the representatives of government, employer and employee are there, this proposal mooted by the government was defeated with both the employer and employees representatives opposing it. The central trade unions representing the workers put up a strong stand, which the others could not object.

Now, the existing practice of 12% deduction both from employer and employee will continue. But the unions can not be complacent. Any minute, the government may try again to get the reduction implemented.

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Good News! Employees Provident Fund Organisation (EPFO) has directed that settlement of all claims like PF withdrawals, pension, insurance claims etc. should be settled within 10 days, instead of 20 days at present.

This was announced at the time of the launching of the online claim settlement w.e.f. 1st May 2017.

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It is reported that the Employees Provident Fund Organisation (EPFO) is to finalise the interest rate for 2016-17. Last year the interest paid was 8.8%. The Central Board of Trustees chaired by the Labour Minister, which is the authority to fix the rates is expected to meet on 19th December 2016. The central trade unions have demanded that the rates should be improved from the last year.

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The Employees Provident Fund Organisation (EPFO) is proposing to increase the maximum amount assured for its Employees’ Linked Insurance Scheme from Rs. 3.6 lakhs to Rs. 5.5 lakhs. This is a much needed change since the earlier amount was fixed years back.

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It has been stated by EPFO that it had settled 11.06 lakh claims in June 2015 within 15 days and 38% of them within three days. It is a record. Naturally it has to settle the claims with good speed. But however, it is not known how much is pending.

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The Labour Ministry has directed the EPF Organisation to invest up to 5% of the EPF corpus in the stock market in this financial year 2015-16. The EPFO is having a fund corpus of about lakhs of crores of rupees. In 2015-16 alone it is expected that the deposit will be around Rupees one lakh crore.

Investing in stock market is risky, since there can be up and down. The Central Trade Unions have been strongly opposing investing in stock market due to this risk. But the BJP led government is determined to put the fund at the disposal of the corporates, which had liberally donated to its election funds.

Strong protest should come from the trade unions against this anti-worker decision.

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One more Private Fund Manager has been approved by the Central Board of Trustees for the Employees Provident Funds for the next three years from this financial year. The new Fund Manager is UTI AMC. The earlier 4 Fund Managers are SBI, ICICI Securities PD Limited, Reliance Capital AML and HSBC AMC. SBI is only the government/PSU Fund Manager.

EPFO has got a corpus of over Rs. 6.5 lakh crore and the major part will be going to the private Fund managers. The safety of the hard earned money of the PF subscribers are in danger.

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The Central Government is proposing to invest 15% of the Rs. 6.5 lakh corpus of the EPF funds to the private equity markets, on the plea that it will give more dividend/interest to the EPF account holders. But the real reason is something else. The private financiers have been continuously demanding that this huge EPF funds should be put in the market. Due to the strong opposition from the Central Trade Unions and the workers, the EPFO could not take such a decision, even 5% to be invested there. There is serious danger of the funds being washed away in the fluctuating markets and the account holders losing all their savings.

The new proposal, whether 5% or 15% to be investing in the market, is strongly opposed by all the unions and workers. The government should not be allowed to divert the hard earned funds of the pensioners for making profit for the private companies and losing it.